Introduction Private commodities are a dime a dozen in today’s fast paced investment world, so finding one that defies fads and trends isn’t easy. However, Experienced players in the stock market will tell you there is only one private commodity that has stood the test of time – oil. Oil qualifies as one of the topmost traded commodities of all time currently in the market, offering traders a global reach and the chance to invest in a necessity for a commodity that plays a key role in a vast amount of many industries. However, for With all the appealing elements of trading oil, the market can be fiercely competitive and confusing to enter. it can be a confusing market to enter. This short guide looks at not only how to trade oil, but how to trade oil successfully. Volatility Volatility and oil seemingly go hand in hand, so should you wishwhen it comes to trade trading oil, it is something that you will just have to work around. It will play a pivotal vital role in how you trade oil and approach the market, as because when volatility is partnered up with leverage, volatility it can quite easily turn your certain profits into unexpected losses. Volatility in the oil market occurs because it isn’t an arenathe global stage is not exclusively for private investors; many large companiesmega corporations and even entire nations want a piece of the action. When said companiesthe big players buy and sell oil in large quantities, the impact sends shockwaves throughout the market and hits the most vulnerable investors. place. If you wish to trade oil make sure you are prepared for the volatile elements that make up the market. Trading Instruments If you wish to trade oil, there are various ways to do so, via a variety of different trading instruments. Oil trading can be accomplished by either sticking to the traditional method of Traditional traders will be able to stick to the classic approach, by trading oil via futures contracts or going for Contract for Difference (CFD) trading. While one side offers stability and long term security, the more modern approach offers positive performance in the shorter term with excellent results. . But, those who want a more modern approach can opt for CFDs. CFDs trading is becoming are the leading way to trade oil through in the day of online and web-based trading platforms. Those who want trade oil online exclusively can also consider Exchange Traded Funds or ETFs as a viable option. Most A significant number of traders look towardschoose to opt ETFs over other options when they want a simplified approach to trading oil and utilise utilize a fund in a process. Risk vs Reward The oil market can be both an excitingprofitable and risky at the same time, tumultuous one and it is easy to get swept up in all of the adrenaline. excitement. Whatever offers excellent margins and unmatched profitability also poses a good deal of risk. However, it is far from a risk free environment and potential damage to profit can be regularly found. Always remember that oil is a leveraged product, which means it is possible that you could lose more than you initially
invest. It This makes risk management an essential requirement for success is all the more important should when you choose to trade oil. Takinge the right action at the right time and implementing a number of selection of risk management tools before putting your capital in the market is a good way to keep some of the risks associated with oil trading at bay. at risk if you wish to ensure you come out with profit more often than not. Final Thoughts It doesn’t matter how you came about investing in the oil market, all that matters is that you have’ve found the right platform. Trading oil It is a field that has plenty ofgreat opportunity for earning handsome returns on your investment, profit, but like other commodities, remember, cetain elements of risk cannot be ruled out. be found around every corner. It The secret to success is in is all about how you navigate such risks that will dictate how much success – and profits - you will find when you trade oil.